Simian and human foamy viruses (HFV and SFV) have complex genome structures which encode the gag, pol, and env genes for virion proteins as well as additional open reading frames (PRFS). One of these is a viral transactivator, designated TAF for SFV and bel-1 for HFV, which augments transcription directed by long terminal repeat (LTR) through cis-acting targets in the U3 domain of the LTR. Recently, an internal transcriptional promoter has been identified in sequences within the 3' end of the HFV env gene. We have demonstrated that SFV-1 from a rhesus macaque and SFV-3 from an african green monkey also encode an internal promoter in the env gene by utilizing transient expression assays in several tissue culture cell lines and by analyzing viral transcripts in infected cells. Transcription directed by the internal promoters of SFV-1 and SFV-3 is activated by the taf-1 and taf-3 gene products, respectively, in several cell types. The importance of a tata box for the SFV-1 internal promoter was established by site-specific mutagenesis; the 5' ends of transcripts initiating in the internal promoter have been determined. Cis-acting sequences in the SFV-1 env gene required for the response to taf-1 are contained within a 121 bp element located 5' to the tata box in the internal promoter. This taf-1-responsive element in the internal promoter (TREIP) functions in a position- and orientation-independent fashion in a heterologous promoter and thus has the properties of an enhancer which depends on taf-1 activity. Alignments reveal that the SFV-1 internal promoter and the SFV-1 LTR have little sequence relatedness. Cross-transactivation studies show that the transactivators of SFV-1 and HFV function on the internal promoter and LTR of the homologous virus but not on the heterologous virus. In summary, the genomes of Simian and human foamy viruses direct viral transcription through both the promoter in the ltr and an internal promoter within the env gene, and each promoter contains a unique enhancer-like element regulated by the viral transactivator.